About 700 fewer child criminals were dealt with by the system

They revealed that 700 fewer children were referred on offence grounds.

However, the annual report of the Scottish Children's Reporter Administration (SCRA) said it was the busiest year on record.

Almost 38,000 children were referred to the Children's Reporter and two-thirds of these referrals were on non-offence grounds.

The dossier follows criticism in a report by former bishop Richard Holloway of plans by ministers to crack down on young offenders.

He insisted the Children's Panel Hearings system had been neglected, in favour of get-tough measures.

Hearings probe

The latest figures show that nearly 37,727 youngsters were referred to Children's Reporter - enough to fill more than half of Murrayfield rugby stadium.

This was the highest figure since the establishment of the system in 1971.

However, the number of children reported for offending was down from 15,132 in the previous year to 14,404.

Over the past decade, there has been a 102% increase in the number of children referred on non-offence grounds

The number of those who had committed crimes rose by 7%.

Principal Reporter Alan Miller said: "Despite intense media attention on youth offending the majority of cases we see relate to non-offence referrals."

The most alarming statistic that emerges from these figures is the sharp rise in those children likely to suffer from a lack of parental care Annabel Goldie Scottish Tories

SCRA chairman, Douglas Bulloch, added: "The Scottish Executive has announced an important review of the Children's Hearings System in Scotland.

"This will build on the work of the past 30 years and develop a strengthened Children's Hearings System for the 21st Century."

Commenting on the report, Scottish Tory justice spokeswoman Annabel Goldie said: "The most alarming statistic that emerges from these figures is the sharp rise in those children likely to suffer from a lack of parental care and those referred on non-offence grounds.

"One of the strengths of the system has been its ability to cater for the needs of those children most at risk, from difficult family circumstances and for whom early intervention can make a huge difference.

Nicola Sturgeon called for a "twin track" approach

"But to be effective, the panels must be able to concentrate their effort on those who can best be helped - that is why we object to the executive's plans to continue to send 14 and 15 year old to the children's panel rather than to the new youth courts."

The Scottish National Party said the executive was failing to tackle crime carried out by a "hard core" of young offenders.

It said the number of children who committed 10 offences or more "jumped by 13% from 797 in 2001/2 to 904 in 2002/3" and the total number of offences broke the 30,000 barrier.

Justice spokeswoman Nicola Sturgeon said: "We need a twin track approach to youth crime that puts resources into our communities to keep our kids out of a life of crime in the first place.